In case you were wondering which trading desks were especially unprepared for the recent fateful turn of events...

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It is traumatic out there. Risk is off. Markets are down. Gold is up. Angela Merkel and Nicholas Sarkozy are having another meeting to discuss matters. There are comparisons with 2008. But maybe this time it's worse.

So which banks appear not to have moderated their risk taking with this sort of thing in mind? Which banks' trading businesses blithely increased their risk in the run up to the second quarter and could yet come to regret it?

Step forwards: UBS and Morgan Stanley.

While most other banks reduced their Value at Risk (VaR) in the second quarter, UBS and Morgan Stanley increased it. Strange that.

Both banks have been under particular pressure to increase their trading revenues and appear to have responded by whomping up risk at what now appears to have bene precisely the wrong moment.

The implication is that neither bank has learned from the mistakes of the past. Even RBS revealed this morning that it had reduced VaR by up to 44% in the second quarter. The outcome at UBS and Morgan Stanley may be even higher trading redundancies than would otherwise have been necessary. Plus non-existent bonuses.

Quarter-on-quarter and year-on-year changes in VaR

UBS: Average VaR in the investment bank up 3% quarter-on-quarter in Q211, up 58% year-on-year

Morgan Stanley: Average VaR up 20% quarter-on-quarter, up 4% year-on-year

JPMorgan VaR: Average VaR down 9% quarter-on-quarter, down 19% year-on-year

Goldman Sachs: Average VaR down 9% quarter-on-quarter, down 26% year-on-year

Deutsche Bank Average VaR stable over the first six months of 2011, down 19% year-on-year

Credit Suisse Average VaR in the investment bank down 8% quarter-on- quarter, down 24% year-on-year

BarCap Average VaR down 2% on 6 months ended December 2010, down 19% year on year.

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